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Mandatory origin marking is a real bone of contention among European business and industry federations. The divergences are not just based on national interests. Different sectors have their own views on the topic. However, stakeholders seem to have one thing in common: they do not like to talk about it.

BusinessEurope's 41 national business federations cannot come to an agreement on the topic. In a position paper, published in May 2013, the leading business lobby stated that "the views of the EU business community diverge". Most members see "no added value" in making origin marking mandatory, arguing that it will not increase safety or traceability, but will instead "involve time-consuming procedures and thus lead to higher costs for manufacturers and importers". On the other hand, BusinessEurope states that some of its members "support the proposal, believing that it would supplement basic traceability requirements".

Nine European business federations published a joint statement to show their support for mandatory origin marking, as they consider it is a tool to address "consumers' safety concerns through sound transparency". Origin marking would thus benefit consumers, the industry and "the European economy as a whole". The position paper was co-signed by CEC (European Confederation of the Footwear Industry), CERAME-UNIE (European Ceramic Industry Association), COLIBI (European Bicycle Industry), COTANCE (European Leather Industry) and EFIC (European Furniture Industries Confederation). Three luxury goods and creative industries organisations also signed the document: Circulo Fortuny (Spain), Fondazione Altagamma (Italy) and Meisterkreis (Germany).

During a debate in the European Parliament's Committee on the Internal Market and Consumer Protection (IMCO), in May 2013, Markus Wiesner, the chair of EFIC, insisted on the need for more transparency. "Consumers have the right to know more about social, environmental and safety standards. Let the consumer make a free but informed choice. More information brings more transparency, more transparency increases product safety. This is not a call for protectionism. We are talking about even more competition." In the opposite corner, EuroCommerce Director for EU Affairs Emilie Prouzet remains sceptical about the argument of increased traceability. "We are not opposed to informing consumers on the origin of products, but that is not the subject of the consumer product safety regulation. Mandatory origin marking is not a suitable tool for increasing traceability."

The German engineering industry is not convinced either. Christian Steinberger, head of the Legal Department at VDMA, the German Engineering Association, reckons that the existing possibility of voluntary origin marking, such as Made in Germany', is "sufficient and appropriate". "Mandatory origin labelling would "increase the bureaucratic burden and penalise SMEs." Steinberger also states that the measure intrinsically leads to protectionism and fears that in the future, origin marking might be extended to non-consumer products.

In a move that came as a surprise to MEPs, the European consumer associations affiliated with BEUC called for rejection of the principle of origin marking, saying it is misleading. "Consumers should have been asked what information they would like to see in terms of origin labelling," said BEUC Director-General Monique Goyens. "If a T-shirt is made in India but the collar is added in Germany, it can be labelled as made in Germany, which is misleading for consumers," she explained. Commissioner Tonio Borg nevertheless stated when the text was presented that the country of production is the one where the greatest part of the production process takes

No accurate data on additional costs

The Commission's 2013 impact assessment on the package states that alignment of labelling may lead to a "very small cost increase for a limited group of producers". However, the impact could not be quantified, as respondents to the public consultation did not provide any concrete data. When the matter of origin marking was first discussed in 2005, the impact assessment read that "the inherent costs to mark a product with the name of the country of origin are quite small". The Commission quoted a study made by MAIA (Market Access Information and Analysis) and the IFM (French Fashion Institute) in 2005. The latter estimated the cost of origin marking on fashionable apparel products to be in the range of one euro to 1.5 euro per article, and up to two euro for footwear. However, after looking closer at the study, it appears that these figures refer to the cost of engraving the indication of the country of origin by heat on footwear and leather products, which is an almost obligatory condition for entering the Mexican market. This seems to be a very specific example that cannot be applied to the industry as a whole. The 2013 impact assessment also notes that "more and more frequently products imported in the EU carry an origin mark as they are not manufactured separately for the EU market but also for other important markets (China, US, Japan, etc) where origin marking is already compulsory".
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Publication:European Report
Date:Oct 14, 2013

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